U.S. grains: Corn and wheat up as crude oil soars

(FIle photo by Allan Dawson)

Chicago | Reuters — U.S. corn and wheat prices each rose more than one per cent on Tuesday as strength in crude oil helped the broader commodities sector rebound from sharp declines a day earlier, analysts said.

Soybean futures were modestly higher, supported by bullish monthly U.S. crushing data.

Chicago Board of Trade December corn settled up 4-1/4 cents at $3.41-1/2 per bushel (all figures US$). December wheat rose five cents to $3.99 a bushel and January soybeans finished up 5-1/4 cents at $9.89-1/2 a bushel.

Grains drew support from oil, with U.S. crude futures rising as much as five per cent on renewed expectations OPEC would agree this month to cut output to reduce a glut.

“Some people are staring at crude, which is up $2 (per barrel), helping corn,” said Terry Reilly, an analyst with Futures International.

Corn is sometimes allied with crude oil because of its use as the primary feedstock for U.S. ethanol fuel.

The 19-market Thomson Reuters CoreCommodity CRB Index climbed about 1.6 per cent, a day after falling to its lowest since early September.

Wheat found support from dry weather in the Mississippi River Delta and portions of the southern Plains that could stress the 2017 winter wheat crop. The crop was 94 per cent planted as of Sunday, the U.S. Department of Agriculture said.

“Adverse weather impacting the soft red winter wheat crop in the Delta and dry weather in southern Great Plains, just before dormancy, is propping that market higher,” Reilly said.

Soybeans firmed after a monthly report from the National Oilseed Processors Association showed its members crushed 164.6 million bushels of soybeans in October, the third-heaviest total on record. The figure topped an average of analyst estimates for 160.5 million.

Export demand has also been supportive, with the U.S. Department of Agriculture confirming sales of more than 700,000 tonnes of U.S. soybeans so far this week.

However, Reilly said the torrid pace of soybean sales should stall in early 2017 as the South American harvest gets rolling.

“We expect the U.S. shipments to start falling off in February, and then really drop off a cliff in March,” Reilly said.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

About the author

Glacier FarmMedia Feed

GFM Network News

Glacier FarmMedia, a division of Glacier Media, is Canada's largest publisher of agricultural news in print and online.

Comments

explore

Stories from our other publications